Lecture 11&12&13 - Decision Making

Question 1

homo economicus

Answer 1

= rational own-payoff maximizer
- sophisticated rational beliefs, stable preferences, maximizes own payoff, disregards other peoples well-being
-> factoring out each potential bias (ex. time pressure, stress, …)
therefore, not real-life applicable …

Question 2

decision making - processes

Answer 2

• goal-directed behavior
• reward learning & memory
• executive control
• inferece to establish causal links
• often in a social context

Question 3

economic vs psychological decision making model

Answer 3

economic: rational (but choice bias)
psychological: context dependent choices (social, cultural, moral)

Question 4

idea of neuroeconomics

Answer 4

= combination of psychology, economics and neuroscience
-> including social context of decision making, evaluates underlying circuits in value-based decision making, investigates which brain chemicals are involved

Question 5

why studying decision making?

Answer 5

• phylosophically (value of decisions)
• economically (consumer decisions; nudging (leading decision making))
• clinical (maladaptove decisions)
  + gambling disorder, impulsive traits, anto-social or norm disregarding decisions

Question 6

expected value

Answer 6

multiplication of objective value times probability (magnitude, times itr probability)

Question 7

risk vs ambiguity

Answer 7

risk = known variance of distribution (gamble effect) 
ambiguity = unknown variance (outcomes); unknown probabilites, need to infer about those

Question 8

reference effects

Answer 8

utility is a subjective value, everyone has own starting/reference point (= marginal utility)

Question 9

risk aversion

Answer 9

preferring lower certain reward over risky higher (on average) reward
-> valuing certainty over gamble (everyone has own subjective treshold about that)
[certainty equivalent shows risk aversion level]
[for gains, the mean utility of the win and loss gamble is worse than the utility of the (mean) certain outcome]

Question 10

when do people become risk seeking? (reflection effect)

Answer 10

in the loss domain
-> the curve in the loss domain is much steeper than in the gains domain (loss is waited much more heavily)
[for gains, the mean utility of the win and loss gamble is better than the utility of the (mean) certain outcome]
-> losses loom larger than wins
- less losses required to offset pros -> utility gains
- implications for framing

Question 11

ambiguity aversion

Answer 11

preference for known risks over unknown risks

Question 12

probability weighting

Answer 12

• people overestimate small chances

- people underestimate large probabilites

Question 13

purpose of rewards

Answer 13

reinforce behavior
-> primary or secondary reinforcers
[remember law of effects, William James]

Question 14

role of dopamine (+ where it is produced)

Answer 14

associated with rewards

Question 15

dopamine - basics

Answer 15

• > produced in midbrain and basal ganglia (substania nigra) [also adrenaline], its a catecholamines
• > innervation of large parts of the cortex
• > changes firing probabiliy of neurons (motor and cognitive effects, therewith effects decision making)

Question 16

dopamine & reinforcement learning

Answer 16

dopamine as teaching signal:

1. reward as expected = no dopamine firing rate change
2. reward better = increased dopamine firing rate
3. reward worse = decreased dopamine firing
   - > learning from (un)expected outcomes
   - > basis of associative learning

Question 17

Rescolra-Wagner learning rule & prediciton errors

Answer 17

associative learning is strongest when difference between prediciton and outcome is the largest (surprise effect, positive or negative)
[outcome - expectation = prediciton error]

Question 18

meaning of undermining motivation

Answer 18

• intrinsically motivated group; reatied rewards signals
• incentivized group (externally motivated); lost reward signals [when external reward is gone, there is also no internal rewards anymore]
• > differential Dopamine releases

Question 19

Dopamine as prediciton error signal

Answer 19

• unexpected reward occuring -> firing increases
• cue predicts reward fully -> firing increases
• oucome lower than expected -> firing rate decreases
• > information

Question 20

dopamine drives learning

Answer 20

-> biases choice behavior towards cues where more dopamine neurons were active (dopamine coactivating receptors leading to enjoyment)

Question 21

temporal difference learning

Answer 21

reward calculation; increase in signal when known that reward will come
-> reward signals influence processing in whole brain

Question 22

which brain area is activated in the cause of unexpected events?

Answer 22

the basal ganglia

Question 23

risk (considering ongoings in the brain)

Answer 23

risk activates network of regions

- insula; potential role in negative outcomes, interoceptive signal, for risk aversion (affecting decision making)

Question 24

ambiguity - when information is missing (brain areas, ongoings)

Answer 24

• lateral and orbitofrontal cortex (higher oder areas); infering about range of outcomes -> executive planning (more active for ambiguity-seeking individuals)
• > requires strategizing (more than simple risk analysis)

Question 25

``` delay discounting (hyperbolic delay discounting) ```

Answer 25

future rewards less values than rewards nearby -> wating for reward incurs opportunity costs (cost of not doing anything else) Hyperbolic DD: preference of which reward to take depends on large, delayed rewards magnitude and amount of delay -> preference reversal; preference in small early rewards on small time scales and reversal when brought to larger timescales -> the steeper the discount curve in the future, the less likely it is waited for the reward

Question 26

pro-social behavior (its drive) - reciprocity

Answer 26

-> human tend to be pro-social even in a one-shot situation stabalizes long-term social bounds (best genes survive), increases group fitness (reputation tracking) -> benefiting from social engagements (direct or indirect (ex. donating) activates ventral stratium, just like for self-rewards)

Question 27

cooperation

Answer 27

activates reward centers; mutual cooperation giving best results -> same activation when reward given to oneself as when given to others (social context)

Question 28

learning whom to trust

Answer 28

- reputation matters (update trust based on feedback) -> capacity (ability grows with development (getting older) Influences on trust: - vignettes: fictional background stories - fixed trustworthiness

Question 29

social discounting

Answer 29

generosity towards others decreases accross social dustance between actor and recipient (more generous to people we feel close to than to strangers) - > generosity declines hyperbolically across social distance - > TPJ, VMPFC, insula frame effect on social discounting

Question 30

involved brain areas in social discounting

Answer 30

junction of VMPFC and TPJ - > temporary deactivation of TPJ increases social discounting - > can be influenced (ex. by giving noradrenaline), but also depends on the progestrone levels accross females mentrual cycle

Question 31

gain vs loss frame (neural processes?)

Answer 31

they are different for both frames and can therfore be mapped on distinct neural networks -> motives underlying generostiy are different

Question 32

``` gain frame (neural mechanims and "feeling") - strong decline in generostiy across social distance ```

Answer 32

TPJ upregulates vicarious reward value signlas in VMPFC in a social-distance dependent fashion -> increase the value of generous option -> being generous is rewarding: VMPFC and TPJ

Question 33

``` loss frame (neural mechanisms and "feeling") -> independent of social distance ```

Answer 33

insula downregulates onw-reward value signals in VMPFC in a social-distance dependent fashion -> decrease the value of selfish option [motivatd by social norms] -> generosity is motivated by guilt aversion: anterior insula and VMPFC

Question 34

effect of stress in social discounting

Answer 34

-> dampens framing effect stressed participants are much less generous towards starngers in the loss frame, but generosity towards family/friends increases -> increased fight or flight behavior (seeking comfort and help in stress situation) -> stress counteract social discounting -> insula activation; harm avoidance

Question 35

5 cooperation rules - Nowak

Answer 35

1. kin selection: when related to person with percentage r, there is incentive to promote genes 2. direct reciprocity: helping each other 3. indirect reciptrocity: helping someone, which helps someone else (no direct return) 4. network reciprocity: find trustworthy group 5. group selection: starts own group found in network reciprocity

Question 36

value-based decision making brain areas

Answer 36

- ventro-meidal PFC; codes abstract rewards signals | - lateral PFC; executive control

Question 37

heuristics

Answer 37

when there are too many choice dimesniosn implied, heuristics are used; using smaller sets of decision features (amount which can be evaluated) -> bounded rationality, shortcuts (anchoring discounts and endowment effects)

Question 38

choice influences

Answer 38

- risk/ambiguity - social contexts - trust and norms - > humans are biased and make use of heuristics